This is the next evolution of warfare⦠[RiskHedge Report] [Stephen McBride]
Turning “slaughterbots” from sci-fi to sci-fact... By Stephen McBride - RiskHedge Itâs a modern-day gold rush... The starting gun has already been fired... And investors who know where the âpuckâ is going stand to come out on top. Regular RiskHedge readers know all about the massive opportunity in artificial intelligence (AI). AI startup funding soared 10X over the past three years. Generative AI companies are now valued at $48 billion, up from $8 billion in 2021. Iâve heard OpenAI, the creator of ChatGPT, is already raking in over $100 million a year in ChatGPT subscriptions. As someone whoâs dedicated my career to disruption investing, itâs my job to alert you to the specific industries and sectors AI will transform over the coming years⦠so you can pounce when investment opportunities arise. Iâve already told you how AI is disrupting Americaâs two most broken industriesâ[healthcare]( and [education](. There are so many AI-related advancements happening in these giant sectors that my research notes stretch into the hundreds of pages. But today, I want to home in on two other industries AI could soon transform beyond recognition⦠and that could offer some big investing opportunities. War: Consider how warfare has evolved due to advances in technology. Thousands of years ago, wars were fought with hands, sticks, and stones. You had to be close to your enemy to kill. Then, weapons like catapults allowed armies to attack from a small distance. Wooden battleships came along in the 1800s and allowed armies to weaponize the seas. Automatic guns and long-distance rifles followed and made it possible to fight your enemy from farther away. Then airplanes, helicopters, aircraft carriers, and long-range missiles made it possible to wage war from across oceans. AI is the next evolution in warfare. Itâs enabling militaries to kill individual targets from thousands of miles away. Ever watched Angel Has Fallen? The best scene from the movie is when Morgan Freeman (as the US president) is fishing on a lake. Suddenly, a swarm of killer drones approaches and kills most of his protection detail. AI is turning âslaughterbotsâ from sci-fi to sci-fact. The US military used a Reaper drone to assassinate an Iranian general in 2020. Drones almost killed Venezuelan President Nicolás Maduro in 2018. Israelâs Harpy drone can identify targets using facial or gait recognitionâand take them outâall without a (human) shot being fired. AI fighter jets are coming, too. In 2020, an algorithm created by Maryland-based Heron Systems defeated a seasoned F-16 pilot in simulated aerial combat. It wasnât close. The AI trounced the human 5â0. Due to how rapidly AI can learn, the system had as much experience as a fighter pilot who trained all day, every day, for 31 years. Think about how this will transform warfare. An F-16 costs $64 million. A pilotâs life is priceless. Both take years to build and train. Now, you can build swarms of killer drones for 1/100th the cost⦠in a few months⦠and it doesnât matter if they all get shot down. Likewise, you can redesign fighter jets to be unmanned, which cuts a lot of the cost. The Pentagon will spend close to a billion dollars on an AI system this year. The Navy is building unmanned vessels that can stay at sea for months. The Army is developing a fleet of robotic combat vehicles. AI is the future of warfare. The next crop of military disruptors will present interesting investing opportunities. Farming: In 1840, seven out of every 10 Americans worked on a farm. That number has dropped to less than 2% of the population today. Yet, America produces more cattle and corn than ever. Technologies like tractors, combine harvesters, and fertilizer made this possible. Soon, weâll be eating AI-harvested fruits and vegetables. John Deere (DE) recently shipped its first fleet of fully self-driving machines. The tractors are equipped with six AI cameras that can maneuver around obstacles. The on-board AI is also slashing chemical use. Deereâs âSee & Sprayâ system can distinguish between healthy and unhealthy crops. It allows for targeted bursts of chemicals to be directed at individual plantsâslashing herbicide use by up to 90%. And its AI-equipped combine harvesters automatically alter their own settings to waste as little grain as possible. John Deere estimates farmers can recoup the cost of buying an AI-enhanced tractor in two to three years. Thatâs a no-brainer purchase. Startups are getting into the farming game, too. UK-based Small Robot Company built an AI system to scan whole fields with centimeter precision. Its âagribotsâ can cover about 20 hectares a day, mapping the health of every piece of lettuce, broccoli, and cauliflower, along with soil moisture. And when weeds sprout up, it can zap them into oblivion. Farming seems like an obscure industry of little importance. But in fact, it is the single most important industry in the world. You could survive without the internet. You canât survive without food. Technologies like tractors allowed us to get more out of the same plot of land. AI offers another huge productivity jump. Iâm hopeful this will lead to high-quality food becoming available at low prices. Todayâs luxuries will become tomorrowâs basics. Beyond education, healthcare, war, and farming... AI is set to disrupt another lucrative industry thatâs been dominated by two of the worldâs biggest tech companies. More to come; stay tuned... Stephen McBride
Chief Analyst, RiskHedge In the mailbag⦠Readers are still writing in with comments on our RiskHedge Report, â[Not sure where to invest? Follow the $1.2 trillion money trailâ¦](â In it, Stephen asks whether you believe climate change is a hoax or an immanent catastrophe. Hereâs what one reader had to say: Hi Stephen, another good article. You asked about climate changeâIâm in the middle (not on the fence). I think itâs real and will evolve our living conditions, but I donât see a pending catastrophe. I tell my kids not to pay too much attention to all the hype about doom happening if we donât do âXâ by a specific date because thatâs the only way anyone gets attention. Yes, I think we as a society need to make changes to reduce carbon emissions, and also plan to adjust to the new realities of a warming planet (whether man-made or not). But letâs do it in a reasonable and planned way, rather than splitting into two camps demonizing each other. âJohn If someone forwarded you this email and you would like to be added to our email list to receive the RiskHedge Report every week, [simply sign up here.](
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